How to Approach Ferguson Stock Ahead of Its Q1 Earnings Release?

Ferguson Enterprises Inc. FERG is scheduled to release first-quarter fiscal 2026 (ended Oct. 31, 2025) results on Dec. 9, before market open. The Zacks Consensus Estimate for earnings is currently pegged at $2.77 per share on revenues of $8.2 billion.

The company’s fiscal first-quarter earnings estimates have remained stable over the past 60 days. The bottom-line projection indicates an increase of 13.1% from the year-ago number. The Zacks Consensus Estimate for quarterly revenues indicates year-over-year growth of 5.3%.

Earnings Surprise History

The company has a mixed earnings surprise history, surpassing the Zacks Consensus Estimate twice and missing in the other two preceding four quarters. The earnings surprise is 7.7%, on average. In the last reported quarter, it reported earnings of $3.48 per share, beating the consensus estimate of $3.00.

Earnings Whispers

Our proven model predicts an earnings beat for the company this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Earnings ESP: Ferguson has an Earnings ESP of +2.53% as the Most Accurate Estimate is pegged at $2.84, higher than the Zacks Consensus Estimate of $2.77.

Zacks Rank: FERG presently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ferguson plc Price and EPS Surprise

Ferguson plc price-eps-surprise | Ferguson plc Quote

Factors Likely to Have Shaped FERG’s Quarterly Performance

Ferguson has been benefiting from strength in its U.S. business, supported by solid demand in the non-residential markets. Strong momentum in waterworks and large capital projects, with strength across commercial and civil infrastructure markets, is expected to have augmented the fiscal first-quarter top-line performance of the company.

Also, stability in its commercial & civil infrastructure markets is likely to have benefited Ferguson’s U.S. business in the quarter. However, soft repair, maintenance and improvement work across residential end markets is likely to have partially offset this strength. The Zacks Consensus Estimate for the U.S. business revenues is pegged at $7.74 billion.

Healthy demand across Ferguson’s non-residential markets, along with the positive contribution from acquisitions, is likely to have driven the performance of its Canada business. The Zacks Consensus Estimate for the U.S. business revenues is pegged at $416 million.

Synergistic gains from the acquisitions made by Ferguson are expected to have boosted its quarterly revenues. For instance, the company completed four acquisitions during the fourth quarter of fiscal 2025, which included Ritchie Environmental Solutions, HPS Specialties, Manufactured Duct & Supply Company and Water Resources. It’s worth noting that acquisitions had a contribution of approximately 1% and 4.9% to the U.S. and Canada business’ sales, respectively, in the fourth quarter of fiscal 2025 (ended July 31, 2025).

Despite the positives, rising input operating expenses are likely to have weighed on FERG’s performance. Rising cost of sales and selling, general and administrative expenses are expected to have dented the company’s margins and profitability in the to-be-reported quarter.

The company has considerable exposure to overseas markets. Given its substantial international operations, foreign currency headwinds are likely to have marred its profitability.

FERG’s Price Performance

FERG shares have gained 4.5% in the past three months compared with the Zacks Manufacturing - General Industrial industry and the S&P 500’s growth of 1.7% and 7.4%, respectively. Shares of the company’s peers, Johnson Controls plc JCI have increased 6.5%, while Fastenal Company FAST shares have declined 13.9% in the same period.

Three-Month Price Performance

Ferguson’s Valuation

Ferguson is trading at a forward 12-month price-to-earnings (P/E) ratio of 22.42X, higher than the industry average of 21.86X. This elevated valuation could make the stock vulnerable to further pullbacks if market sentiment sours.

In comparison with FERG’s valuation, its peers, Johnson Controls and Fastenal Company, are trading at a premium. Notably, Johnson Controls and Fastenal Company are currently trading at 24.33X and 33.74X, respectively.

Price-to-Earnings (Forward 12 Months)

Investment Thesis

Solid momentum in the company’s U.S. business, supported by healthy demand in non-residential markets, is likely to drive Ferguson's performance in the quarters ahead. Also, the company’s strategic acquisitions and focus on expanding its businesses bode well for its long-term growth.

However, rising operating expenses remain concerning for its near-term margin performance. Also, the company’s expensive valuation warrants a cautious approach for existing investors.

Conclusion

Despite strong fundamentals and several upsides, certain near-term challenges, such as an increase in costs, a high debt profile and premium valuation, are limiting Ferguson’s near-term prospects. 

While current shareholders should hold their positions, new investors should monitor the developments pertaining to the stock closely for a more appropriate entry point. Therefore, it might be prudent to wait for FERG’s earnings report before making an investment decision.

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This article originally published on Zacks Investment Research (zacks.com).

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